Competency 3006 Case Study

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Competency 3006.1.5: Legal and Regulatory Requirements Overview Dodd-Frank Wall Street Reform and Consumer Protection Act Under the Dodd-Frank Wall Street Reform and Consumer Protection Act (passed in the wake of the 2008–2009 financial crisis), the Securities and Exchange Commission (SEC) will pay 10 to 30% of the amount the government recovers from financial fraud if the whistleblower provides original information leading to a recovery of more than a million dollars. False Claims Act * Recent legislation has made it easier and potentially more lucrative for employees to blow the whistle to regulators when companies are government contractors or when the federal government has somehow been defrauded. * Whistleblowers who report…show more content…
* Does not provide for financial incentives. * Does not protect employees at private companies. U.S. Sentencing Guidelines (In Brief) * The sentencing guidelines were designed to use a “carrot and stick” approach to managing corporate crime. The carrot provides incentives to organizations to develop a strong internal control system to detect and manage illegal behavior. * The guidelines propose that organizations establish and communicate compliance standards and set up communication, monitoring, reporting, and accountability systems. In this approach, the stick provides for severe punishment for organizations that are convicted of crimes and were not proactively managing legal compliance within the organization. * Seven requirements (outlined in detail in Table 6.1 in the text) for due diligence and an effective compliance program: 1. Establishing compliance standards reasonably capable of preventing criminal conduct 2. Assigning specific high-level individuals with responsibility to oversee those compliance
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